, London United Kingdom (PressExposure) July 30, 2008 -- No sooner had the Federal Reserve's aimless statement been digested, sources at Cornerstone Worldwide are thought to have reissued their "short the banks" advice to their private client roster. As if in agreement, Goldman Sachs today cut both Citibank and Merrill Lynch 2nd quarter estimates on expectations of further writedowns.
While some have suggested that Citibank, Merrill and other similarly beleaguered US and European banks had already plumbed the depths with their share price, sources close to Cornerstone Worldwide have theorised that the private client asset management firm sees significantly more downside potential in the coming weeks and months.
Citigroup, America's largest bank, may reduce the value of its assets by $8.9 billion, causing a third straight loss for the New York-based company which has written down a staggering $44 billion of its assets.
Sources close to Cornerstone Worldwide apparently pointed to a recent announcement of 13,000 job cuts at Citi this year, and the bank's forecast this month of ``substantial'' additional writedowns and more losses on consumer loans as more evidence of additional downside risks.